Transcript of "When One Business Model Isn't Enough: LAN Airlines"

2.
Trying to operate more than one business model at a time
• To expand new market
• To make more efficient use of fixed asset and resources
• To Develop new income
Direct-Sell
2 Business model
- DVD by mail
- Streaming video services
Flourishes by running 3 distinctly
different operation at the same time

9.
• Maximal use of physical assets
 Increased utilization of as costly as asset as aircraft
 Change from parking to delivery time
• Reduction of the break-even load factor(BELF)
 Combining cargo and passenger operation
• Diversification of revenues and profits
 Minimize risks
• Reduce threat of entry by other airlines
 Increased the number of routes
• One-stop shop for cargo in Latin America

10.
“Why doesn’t every airline do what LAN does ?”
History of LAN :
• 1994 Chilean privatized LAN -> Cueto Family
• Begun Cargo business with Fast air since 1970’s
• Combine Cargo and Passenger service
Profit potential of LAN international’s route
• Wide body air craft
• Reputation and reliability

13.
Advantages using more than one business model
• Decreasing the break-even load factor
• Combining cargo and passengers
• Flying to more places
• Better services to passengers and increase customers
• Using grow revenue provided by cargo operation
• Increase barriers to entry
• Flying to more places make other airline harder to enter and grow

14.
Advantages using more than one business model
• Increases barriers to imitation
• Optimizing the use of aircraft and network of route
• Increases switching costs
• Leading passenger airline connecting from Latin America
• One-stop shop for cargo in the region